Sorting out your cash flow
- Get an overdraft! Already got one? Get a BIGGER one!
- Improve your trade credit (ask suppliers if you can pay tomorrow… or the day after)
- Get more deposits… tell your new customers they can’t “pay in six months” any more
- De-stock… get rid of your spare stuff, and stop renting that warehouse!
- Lease (borrow), don’t buy!
- Delay paying… but this could get you a bad reputation, or might be against the law
- This is cash flow we’re talking about here, so these fixes are all rather short-term. They ought to keep a business running on a daily / weekly business if it got into trouble
- There are ways of increasing your income in the long-term…
- One of these is to expand
- Internal expansion is the safest way to do this, and involves opening more shops or offices, or making your current one BIGGER
- External expansion is more risky, but could pay off nicely for shareholders
- It includes taking over other companies, and franchising
- Aside from expanding, there are two other ways…
- The thing is, I like to keep these paragraphs quite small so I’m gonna start a new one:
- Fire people… Get rid of someone and share their work out.
Maybe a more politically correct and less evil way of saying this is “make redundancies”, or “reduce the workforce”
- Managers get paid more, so you can save a lot by firing them…
- Cut wages. But doing these things is pretty nasty to your employees.
- It’s probably not a good idea because they could get very unhappy and lose motivation / productivity. They might even just quit.
- On a lighter note, you could contract out some jobs – instead of hiring new employees to do something, pay a different company to do it for you
- Raise prices. This will bring in more money, but if customers find cheaper options out there your sales will fall!
- Add new products. It could cost a bit in research and development, but a new product could be just the thing a business needs!
- Increase sales. Advertise to attract new market segments!
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